By Tim Armstrong and originally published on The Socialist Entrepreneur
How US cities are beginning to take an active role in promoting worker-ownership
There are certain places in the world, like the Basque Autonomous Community in Spain for instance, or the Emilia-Romagna region in Italy, where worker-ownership is much more common than usual, and one naturally wonders why this might be? Some of the difference is clearly historical and bottom-up. These regions often have a long socialist or collectivist tradition, and so folk living in these areas are more likely to think of worker-ownership when they start a business. But some of the difference is also top-down. Governments in these regions are often more supportive of worker-ownership in general and put policies in place designed to support local cooperatives.
In contrast, the United States has long been one place in the world where worker-ownership is substantially less common than in other areas, but in the last couple decades, in some cities anyway, this appears to be changing.
Stacy Sutton from the University of Illinois in Chicago has just published an interesting article in which she describes and surveys the relatively new phenomenon of ‘cooperative cities’ in the US. These are cities where the local municipal government offers support to cooperatives and, to a greater or lesser extent, tries to grow the cooperative sector in their area.
Surveying all 51 US cities with populations over 100,000, she found 12 cities that she classified as ‘cooperative cities’ in this sense. Looking at the type of support they offer, she further classified these cities into three groups:
1.Developer cities: These are cities that started without much of a local culture of worker-ownership, and the energy for the development of a cooperative economy in these cities is therefore mostly top-down, with the local government taking the lead in providing support. This group includes: Cleveland; Richmond, California; Richmond, Virginia; and Rochester.
2.Endorser cities: These are cities that already had a lively cooperative sector in place when the local government started to get involved, so most of the energy for the development of the cooperative sector is bottom-up, originating in the local communities themselves. This group includes: Austin, Berkeley, Boston, Oakland, and Philadelphia.
3.Cultivator cities: These are cities where there is both bottom-up activism and top-down support for worker-ownership, where there is a strong cooperative culture in local communities that is matched by vigorous support from the local government. This group includes Madison, Minneapolis, and New York.
She doesn’t exactly say it, but Sutton strongly implies that the third group, cultivator cities, provide the strongest model for municipal cooperative development, and she reserves particular praise for New York and its Worker Cooperative Business Development Initiative with a budget of over $3,000,000 to support new and existing cooperatives.
Sutton ends her article on an optimistic note, citing a US Small Business Administration estimate that about 32,000 new businesses are started in the US each year, and imagining how different the US would be — in terms of employment, inequality and civic engagement — if even just a third of those new businesses were formed as worker-cooperatives.
Currently there are a little over 300 worker-owned businesses in the US, a long, long way from 11,000 new coops each year, but Sutton is right to be optimistic and ambitious. The US government at all levels spends huge money on promoting capitalist start-ups; if more of that money started flowing to support worker-owned startups, there is no reason worker-ownership couldn’t be just as strong in the US as it is in many other places in the world.
Stacey A. Sutton, “Cooperative cities: Municipal support for worker cooperatives in the United States.” Journal of Urban Affairs (2019): 1-22.
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Featured Image by Enlivening Edge Magazine.